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Del. overpays Medicaid bills

Del. overpays Medicaid bills

By Jason Miller

Sep 28, 2001

The Medicaid program, which provides health insurance for about 40 million low-income Americans and likely will absorb $219 billion in state and federal funds this year, suffers from improper payment losses that the federal government estimates at $11 billion to about $20 billion each year. Sometimes balky computers compound the payment foul-ups.

Delaware's Medicaid system became the latest to go awry when the state auditor found the Health and Social Services Department made more than $364,000 worth of payments on behalf of deceased recipients. The problem arose because of a hiccup in the three separate databases that track those statistics.

In one case, a pharmacy submitted a Medicaid claim for a 60-day supply of Prozac 12 days after the beneficiary died.

$50 million overpaid

Delaware joins a host of other states including Hawaii, New York and Texas that are working to recover overpayments from health care providers made because of problematic information systems or vendor fraud.

In New York, for example, the state auditor found that 77 state hospitals billed the state more than $50 million incorrectly because of errors in the state's tracking system.

Delaware's audit, which reviewed payments made over a two-and-a-half-year period starting in July 1998, found the HHS' eligibility system, called Delaware Client Information System II (DCIS2), was not linked to the state's Vital Statistics Bureau database. It therefore did not automatically update when a beneficiary died. Without this information, the state paid managed care providers for posthumous services.

The audit also said the date of death in the eligibility system did not update in the Medicaid Management Information System, which is run by EDS Corp.

'We knew there were problems, and we fixed some of them in 1999,' said Sandy Salter, social service manager of the HSS Information Systems Unit.

Salter said most of the audit's findings have been fixed through simple programming changes.

'We put in alerts to notify workers when the automatic update of the DCIS2 from vital statistics is run,' she said. 'The case worker also will be alerted when the case is closed but they need to perform an action on it.'

The most challenging adjustment, however, will be changing the Master Client Index to accept and update the data from vital statistics. The MCI is a departmentwide system that contains demographic information about each beneficiary, and the changes must be agreed upon by a number of different offices within the department. DCIS2 and MCI work in tandem to make sure information is entered correctly and updated.

Both use IBM Corp.'s DB2 Version 5 database system that resides on an IBM dual-processor, 166-million-instruction-per-second S/390 G5 mainframe server with 2G of memory.